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Supply Chain Competitive Advantage through Blockchain technology

Supply Chain Competitive Advantage through Blockchain technology

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Digital technologies have transformed the way supply chains are operated in the recent past. One such prominent technology that redefined the strategies, practices, and activities of the supply chain is blockchain technology.

This technology is an application consisting of abilities such as computing in a distributed manner, huge storage of data, transmission of data from point to point, secured and encrypted data, mutual collaboration and consensus with the partners in the system (Wu, 2023).


It is an improved database which permits information sharing in a transparent manner within the stakeholders of business network. This technology stores data in multiple block which are inter-linked with each as in a chain. It is also popularly known as distributed ledger technology using the internet infrastructure in supply chain. The emergence of this technology and its potential to virtually inter-link the members of supply chain process provided the organizations with a new type of virtual supply chain network. Linkage of several computers, also known as nodes is the main network of blockchain used for information sharing with the details of source or origin of information. Unique feature of blockchain technology is it is acts like a public digital ledger which distributed and decentralized and has the ability to record multiple transactions that take place across the supply chain connecting several computers. The record can not be modified or edited without modifying the remaining blocks and without the approval of the network (Tschorsch and Scheuermann 2016).


Reasonable use of blockchain technology in supply chain is found to improve the quality of supply chain transactions among the participating enterprises (Fan & Tang, 2018). It also enhances the supervision of product quality resulting in improved customer satisfaction and trust (Huo & Zhan, 2019). Some of the most distinctive benefits of application of blockchain technology in supply chain are enhanced transparency, improved efficiency and collaboration, increased product traceability, enhanced security, reduced delay of product movement, cost saving, and improved trust and reliability (Underwood 2016; Wang et al. 2016; Yli-Huumo et al. 2016, Wu, 2023).


A blockchain can be thought of a digital ledger available for all members of supply chain through easy access and trust with an increased efficiency and security of smooth flow of goods and flow of information across the chain. Thus, this technology aids in achieving the competitive advantage in supply chain.


How does a Blockchain work in the Supply Chain?


It involves a series of interconnected steps to achieve the above-mentioned advantages. These steps are,

  1. Product Creation and Identity on the Blockchain
  2. Supplier and Raw Material Traceability
  3. Recording of product stages in manufacturing and production
  4. Recording of details of logistics and distribution of product
  5. Recording of details of product at the receiving stage
  6. Details of product availability at the retailer’s place
  7. Details of after-sales or return of product

A summary of these steps is provided here. Each product is assigned a unique identifier or digital "token" on the blockchain. Information about the product, including its origin, manufacturing details, and any relevant certifications, is recorded on the blockchain. When raw materials are sourced from suppliers, the transactions are recorded on the blockchain. Smart contracts may automatically execute based on predefined conditions, such as confirming the quality of raw materials upon receipt. As the product moves through the manufacturing process, each step is recorded on the blockchain.


These contracts provide alert about inventory level updates, quality issues and many other vital signals related to the data. The details of product once it is ready for dispatch and delivery are noted through the blockchain. All members of supply chain process will be able to quickly access the accurate information and the movement of goods across the chain. An automatic update about the details of product and inventory signaling the need for payments and other related activities is done by blockchain once the product arrives at the place of retailer. Product availability in the retailer’s shelft and customer transactions of the product are automatically recorded through the blockchain at the retailer’s place. All the details about the product can be accessed by the consumer using the QR code available on the product. The data related to transactions of returns etc is also recorded on the blockchain leading to the completion of entire cycle of product’s journey in a transparent manner (Yli-Huumo et al., 2016; Iansiti & Lakhani 2017; Saravanan, et al., 2019).


All these steps are easily accessible to all the stakeholders involved in the supply chain in a highly transparent manner. This transparency reduces the risk of errors, fraud, and delays, while also providing a trustworthy and traceable history of each product leading to providing a huge support in achieving a competitive advantage in supply chain for an organization.



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  • Saravanan, A., Vasudevan, V., & Chin, J. J. (2019). Blockchain in supply chain. In 2019 2nd International Conference on Data Intelligence and Security (ICDIS) (pp. 77–82). IEEE.
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